White Knights Charging Forward To Save Hyflux And Tuaspring

In my last post on 21st July 2018, I have posted the reasons on why the government should step in to bail out Hyflux. I have also mentioned that Temasek linked companies such as Keppel and Sembcorp should step forward to rescue Hyflux. My wishes came through-both Keppel Corp and Sembcorp appeared as white knights in shining armour along with other interested parties. Out of 8 interest parties approved by the PUB, only one submitted a bid. It was believed that the only bid was submitted by Sembcorp. 

As I mentioned before, Hyflux investors will have to suffer a hair cut in terms of what they can recoup. The only question now is how much they can get back. I believe that more news on the rescue package will be announced as early as next week. It will not be a surprise if the bidder put in a bid that is significantly less than the S$1.3 billion in book value of Tuaspring. Temasek linked companies or not, the bidder will likely exploit the current weaken financial position of Hyflux to extract a good deal for their own shareholders. Nonetheless, it will be a win win deal for both parties.

It will be interesting to watch out for the unfurling of more details with regard to the rescue package next week.

P.S (Updates as of 20 Oct 2018): It turned out that the White Knights are from the Indonesian consortium making up of the conglomerate Salim Group and the energy giant Medco Group. The consortium will pump in liquidity of S$400Mil equity in exchange for 60% stake in Hyflux after they have settled their debt. Also a loan of S$130Mil for Hyflux for its working capital needs during the restructuring. A cool S$530Mil. This is a strong testament to the underlying value in Hyflux business operations that many experienced businessmen still see in it. There will also be additional business opportunities opening up to the "new Hylflux" from the synergy with the new shareholders coming onboard.